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Import quotas and tariffs

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What role does the government play when it comes to quotas?

Can you explain, in economic terms, how quotas work? I've looked at some diagrams but do not understand them.

How do quotas affect international trade & domestic manufactures?

Who wins when quotas are used?

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Import quotas and tariffs are assessed.

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What role does the government play when it comes to quotas?

Governments impose restrictions on quantity, or sometimes on total value of the imported goods. This cause prices to rise in the domestic market which is beneficial to domestic manufacturers. In order to impose quotas, governments administer a limited number of import licenses that may be sold or directly allocated to individuals or firms.

Can you explain, in economic terms, how quotas work? I've looked at some diagrams but do not understand them.

Assume that there are domestic ...

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Umut Oltulu, MBA
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  • BSc, Dokuz Eylul University
  • MBA, Texas A&M University-Kingsville
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